Follow the Golden Rule...

Economists from the universities of York, St Andrews and Lancaster published their research on the Golden Rule and consistent behaviour. Professor Yuan Ju, of our Department of Economics, describes their work.

Recent events, to the dismay of many, seem to suggest that intolerance and prejudice are on the rise. And, more eagerly than ever, we long for a society of compassion and a global community in which nations and people, powerful or not, don’t treat others the way they don’t wish to be treated.

The Golden Rule in the lab

World religions know this as a form of the Golden Rule: “Never impose on others what you would not choose for yourself*”, This tenet could be found in almost every religious teaching. In many cultures, the Golden Rule is one of their bedrock moral principles.

But do people in modern societies really stick to the teaching of the Golden Rule, especially when there are pecuniary consequences to their actions? Professor Yuan Ju and his coauthors brought this question into the laboratory, and set out to answer it with a simple game of bargaining.

They invited 300 students in total to the laboratory at the Centre for Experimental Economics (EXEC), and asked each of them to make a series of decisions regarding the split of a fixed amount of money between themselves and another anonymous person in the room.

Each participant could offer their opponents anything from zero to the full amount in whole pounds; if the opponent said “yes” to the offer, they could both receive the money in the proposed way.

But the other person could reject the offer, which would result in a breakdown of negotiation, meaning both will get nothing from this round of the game.

What is particularly interesting is to see how people would react when they play the responder’s role and are confronted with the same proposal they themselves had made.

Compelling results

Their paper, newly published in Economic Inquiry, finds compelling evidence that suggests most people’s behavior conforms to the Golden Rule.

According to the study, about 93 per cent would say yes to their own offers. Through a belief elicitation method, the research also finds that, possibly to the surprise of many economists, such Golden Rule behaviour is not driven by people’s monetary pursuit.

They find that an important factor that discourages people to follow the Golden Rule is when people know their behaviour will not be observed by their opponents.

When people are told that their opponents would not see their offer when making the decisions, the percentage of Golden Rule behaviour dropped by nearly 20 per cent.

With the help of statistical models, they are also able to identify several traits that belong to those who practice the Golden Rule in their experiment.

Unsurprisingly, those who are more generous with their offers are more likely to follow the Golden Rule. But interestingly, among all the participants, those who take longer to decide how to split the money are more likely to stray from the Golden Rule.

Naturally, one would ask does following the Golden Rule pay off? At least in their experiment, those people who follow the Golden Rule earned more from the negotiations.

As an important notion in social psychology, projection bias says people have the tendency to project their own thoughts, preferences, and behavior onto other people. Their research finds that people’s stated beliefs and actions reveal mild projection bias. This finding is intriguing, as there seemed to be no such studies for a one-shot asymmetric game.

The message

This research is thought to be the first rigorous and comprehensive experimental study that offers quantitative evidence on the Golden Rule. It brings together an ancient philosophical discussion and the modern research methods of experimental economics.

And relevant to the present day, besides its scientific contributions, the paper’s positive message on the Golden Rule could also bring us some consolation and hope during this turbulent time in global politics.

*This is the negative form of the Golden Rule, often called the Silver Rule. Given its prevalence in almost all cultures and societies, we confine to this form of the Golden Rule. Generally, the Golden Rule has other interpretations. Its positive form, not explicitly studied here, states that one should treat others as one would like others to treat oneself, as appears in the Bible: "So whatever you wish that others would do to you, do also to them, for this is the Law and the Prophets."

Posted on 15 February 2019

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About 93 per cent follow the Golden Rule. Through a belief elicitation method, the research also finds that, possibly to the surprise of many economists, such Golden Rule behaviour is not driven by people’s monetary pursuit.

Professor Yuan JuProfessor of Economics

This research is supported by the Research and Impact Support (RIS) fund at the Department of Economics and Related Studies in the University of York.

Featured researcher

Professor Yuan Ju

Chair of the Departmental Research Committee

Professor Ju's research interests are game theory, microeconomics, social choice and experimental economics.